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Communities mull challenges, benefits to municipal broadband

April 20, 2017
By: Jonathan Dworin

Broadband connectivity is foundational for regional competitiveness in the global economy, prompting more states and communities to develop innovative solutions to expand high-quality broadband access for their businesses, residents, education systems and public sector.  Tennessee Gov. Bill Haslam provided one of the most recent examples of the trend by signing legislation making it easier for municipalities and cooperative boards to deliver broadband connectivity in underrepresented communities throughout the Volunteer State. Considerable socioeconomic and political challenges remain for communities interested in providing broadband service at the municipal level.

Next Century Cities, which represents 169 U.S. cities of all sizes interested in the role of next generation broadband for their communities, recognizes that one of the biggest challenges for increasing broadband speed, affordability, and accessibility are the laws on the books in 20 states limiting or prohibiting local authority to build, own and/or manage broadband networks. A recent survey by Pew Research Center found that seven in 10 Americans support local governments building their own high-speed network. Approximately two-thirds of both Republicans and Democrats surveyed stated they would support such a measure.

In Emerging Issues in Expanding Next-Generation Internet Access, Next Century Cities’ policy agenda, the organization identifies several barriers for delivering better broadband access, including:  a cumbersome permitting process; legal challenges blocking competition; lobbying efforts of incumbents; and a lack of investment in rural and low-income areas. The agenda also includes examples of how some communities are adopting creative strategies to ensure broadband access through partnerships, investment, and ingenuity. Many rural co-ops focusing on telephone and electric service are beginning to make investments in fiber infrastructure, while new community-owned networks are beginning to provide broadband service in rural areas of states like Minnesota and Vermont.

Government-owned utilities offering high-quality broadband service like Chattanooga’s Electric Power Board continue to face challenges, even as state legislatures seek to expand rural broadband connectivity. In a ruling last August, the 6th Circuit U.S. Court of Appeals rejected a  Federal Communications Commission effort to preempt restrictive state laws in Tennessee and North Carolina that prevented municipal broadband providers from expanding service beyond their municipality. The FCC had argued that more competition in the broadband market would be better for the public’s interest, especially in rural areas underserved by traditional broadband providers.  Ultimately, the court determined that municipal broadband services were valuable, but that the FCC could not preempt the state laws.

The recently passed Tennessee Broadband Accessibility Act, one of Haslam’s key initiatives, would provide broadband assistance in underserved rural areas but would not allow government-owned utilities to provide service beyond their municipal boundaries. Instead, the bill seeks to expand broadband service in rural areas by allowing electric co-ops to provide broadband service separately from their electric power service, permitting the electric co-ops to provide video/cable TV service and, providing $30 million in grants and $15 million in tax breaks to expand rural broadband.

The debate over municipal broadband is, at its core, a debate over the type of broadband system the United States should have, according to Rob Atkinson and Doug Brake of the Information Technology and Innovation Foundation (ITIF). In How Broadband Populists Are Pushing for Government-Run Internet One Step at a Time, a January 2017 report by ITIF, the authors suggest that the current model comprised of “lightly regulated industry made up of competing private companies” is the superior path forward. Others, however, disagree. For example, in her monthly newsletter, Innovation Policyworks’ Cathy Renault notes that if the authors spent time in “rural states where struggling phone and cable companies are doing almost nothing to provide high-speed broadband to large swaths of the population” they would “better understand the desire by some communities to get into the municipal broadband game.”